More and more credit life insurance companies are seeing an uptick in the credit life insurance policy claims. This is due to the COVID-19 pandemic, which has resulted in the possibility of consumers retrenched as recession makes an abrupt comeback.
South Africa went into a national lockdown in March in an effort to curb the spread of coronavirus. As a result, consumer demand fell and production across all sectors declined in the face of isolation.
Most companies resorted to retrenching their staff as they could no longer afford them.
Consumers have since been cashing up on their credit life insurance claims, which cover for death, disability and retrenchment. This is seen as an attempt to make ends meet.
Co-founder and CEO of credit life insurance company Yalu, Nkazi Sokhulu, says the insurance policy will pay one’s loan installments during the period of retrenchment.
“There’re three incidents where the credit life insurance policy will pay out. The policy will pay your loan installments during the period of retrenchment.”
Wits Business School’s Professor Jannie Rossouw says that people should be cautious in taking up debt in these trying times. They should rather consolidate their debts to protect their credit record.
“In uncertain times such as the lockdown, it’s generally not a good idea to take up additional debt, to protect the consumer and the credit outlook of the consumer.”
With the current COVID-19 pandemic, death and retrenchments are inevitable as the global economy contracts rapidly. Thus, Credit Life Insurance companies urge consumers to go through their policies to ensure that they are covered for the eventuality.
In the videos below, banks offer clients relief through credit life insurance:
Short-term insurance specialist at Refined Sekgobola Thobakgale explains how insurance claims work during a lockdown:
In the videos below, banks offer clients relief through credit life insurance.
-Reporting by Nothando Magudulela